The Abowd–Kramarz–Margolis (AKM) regression is widely used to analyz=se firm wage premia. We derive a general potential outcome decomposition of the AKM estimand and show that it is a worker-weighted average of causal effects of moving between pairs of firms.
- Speaker
- Date
- Thursday 7 May 2026, 12:00 - 13:00
- Type
- Seminar
- Room
- ET-14
- Location
- Campus Woudestein
(with X. Huang, T. Lamadon, M. Mogstad, A. Shaikh)
Under strong assumptions, this decomposition collapses so that the AKM estimand for a specific firm equals the causal effect of moving from the left-out firm to that firm.
We give necessary and sufficient conditions for the AKM estimand to have this causal interpretation and propose tests for the sufficient conditions.
n an application to Italian administrative data we document that the standard AKM estimator can be severely biased when these conditions fail. We propose a matched-AKM estimator that consistently estimates causal firm effects under weaker and more realistic assumptions.
See also
- More information
Do you want to know more about the event? Contact the secretariat Econometrics at eb-secr@ese.eur.nl.
